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Transcript:

Evan Leybourn ‑ Agile2018

Announcer: The Agile Toolkit.

[music]

Bob Payne: I'm your host, Bob Payne. I'm
here with Evan Leybourn from Australia. Evan, you're ahead of the
Business Agility Institute, and you guys just released the Business
Agility report today, you're at Agile 2018. I was leafing through
it. There's a lot of great infographics and information behind
those infographics.

Do you want to just talk about how you went about getting the
report? Then, maybe we can talk about some of the interesting
results.

Evan Leybourn: Thanks, Bob. It's great to
talk to you again. I absolutely love being on this podcast. I think
it's my third time now. [laughs]

Bob: Is it third already?

Evan: Third already.

Bob: [laughs]

Evan: Third already. We put together the
reports over the last couple of months based on the feedback we had
from our members. A lot of people were asking for evidence.

There's a lot of hearsay. There's a lot of anecdotes about
business agility, and they wanted more proof. How does it work? Why
does it work? Who does it work for?

We went out, and we started sourcing information. We put out a
survey. We'll share the link with your listeners in the text below
the podcast. We got some fantastic insights which, I'll be honest,
not many surprises. Most of the anecdotes that we hear, the data
has borne it out, so that's actually pretty fantastic.

Bob: If not surprising, what are some of
the important insights that folks were questioning and that now has
been borne out in the data?

Evan: [laughs] We can probably narrow it
down. I'll give you the really simple ones. The larger the company
is, the less agile it is. I don't think that's a surprise to
anybody at all.

Bob: [laughs]

Evan: Now, we have the data to show just
how much more agile a small company is. In fact, we're doing some
additional research now in terms of company thresholds, the size of
organizations, and the operating model that's required for agility
at those sizes.

15 to 50, 50 to 150, how do those sizes interface with agility,
the practices, and the principles behind that? We know that agile
organizations work differently. We know there are benefits, but how
does size...

If I'm 5‑person organization, then how I do agility is has to be
different if I'm a 5,000‑person organization. We want to be able to
outline that this generic information about X, Y, and Z, this is
how it's specifically tailored to every size.

Industries' wise, financial services, information technology and
consulting, the top three industries who are adopting business
agility right now. Both in terms of the quantity of organizations
doing it as well as the maturity or the fluency that those
organizations have.

That's not really a surprise. We know from personal experience
that banking and finance, every bank is trying to...

Bob: Huge competitive pressures with dust
cycles.

Evan: FinTech eating their breakfast as
they say. IT companies, Agile emerging technology and software.
It's natural for these organizations to expand beyond the IT early,
certainly earlier than other organizations.

Consulting was a bit of a surprise. I wasn't expecting them in
the top three. In fact they're number one to be precise. Now,
cynical Evan thinks that, "Well, maybe the consulting organizations
are just sort of..."

Bob: Self‑reporting a little higher.
[laughs]

Evan: Self‑reporting a little higher
because they're trying to say, "Hey, look how great we are." Less
cynical Evan actually there's some logic behind it because
consultants do need to be at the bleeding edge of business.

If they're going to be transforming the client organizations,
they've already got to be there. It does make sense that a lot of
these consultancies are pushing the boundaries as much as they can.
I think that's a natural behavior.

Bob: Did you get any breakout that was
aggregated against those different industries? Were different moods
of business agility?

Evan: No.

Bob: Was it really customer pitted or
service or...?

Evan: We did slice and dice. We had some
data scientists look at this information for us. They're the ones
who provide a lot of the insights. We wanted to make sure that we
were doing it meaningfully, specifically meaningfully.

When we looked at the data, whether we sliced it at the company
size, whether we sliced it by industry, not by industry, by company
size or by high fluency, if we remove just the high fluency run the
ones who are 9s and 10s, the outliers.

Even if we normalize for who's reporting, whether it's the CEO
reporting or an individual contributor because there was a
difference. Even after all the slicing, those three industry still
came out as 1, 2 and 3 so no matter how we sliced the data. It was
pretty consistent actually. In fact, I mentioned that contributors,
that was one of the few surprises that we got.

Anecdotally, I assumed that the C‑Suite would over‑report and
the individual contributors would under‑report maturity or fluency
in business agility. We actually found that, because we had
multiple respondents from the same company, in a single
organization we thought they'd be different, but they were actually
within 0.5 of a point from each other.

Bob: That's probably...

Evan: It's statistically...

Bob: ...insignificant.

Evan: ...insignificant. Now, there is a
trend. Yes, the CEO is 0.5 higher than the individual contributors
and line managers and senior leaders. Senior executives fall on
that trend line, but it's quite negligible.

The big surprise was we invited external consultants to assess
the maturity, the business agility, fluency of their client
organizations. They were about 15 percent lower on average.

Bob: ...as well, because I can't really
help unless I'm in some aspects better at it than the
organization.

Evan: Yeah, it's interesting. We need to
do some further investigation as to why that's the case. My gut
feeling is that there's probably two main reasons. The first being
the rose‑colored glasses that happen within an organization. You
see the transformation, you see you're making change, and it looks
a little bit better, but the people from the outside are comparing
you against...

Bob: Other people.

Evan: ...other people who are better. As
an outsider, what you rate as a five, I rate as a three, just
because I'm seeing that's a five over there. The inverse is also
true.

Bob: We probably have different north
stars that we're measuring against.

Evan: That's it. Maybe someone who's
outside doesn't see a lot of the good. They're dealing with the
procurement processes, they're dealing with the contracting
processes, which are painful in almost every organization.

They would underreport their client organization because the
business agility hasn't hit procurement yet. It's just hit how
employees are being engaged. Maybe they're underreporting for that
reason as well.

Bob: Was the survey both public and
private sector?

Evan: It was actually mostly private
sector. We had a small number of respondents from the public
sector, two or three percent. Though that data has mostly been
excluded from the report just because there wasn't enough data
points to meaningfully assess that information. We're hoping that
version two of this report will be able to draw the public sector
view.

Because we are doing the government's Agility Conference in
November, I think it would be a good idea to actually maybe create
a government version where we survey the government organizations
before the conference and maybe put something together for
them.

Bob: Even if we have some objectives out
of the conference, what do we want people to take away, even if
it's a simple survey of, before they attend the conference, after,
how much more do they know about business agility, if they're not
already executing in that way. I really see, and I know we've
talked about this, on the committee calls...

[laughter]

Bob: ...the Government Business Agility
Conference. It is just the early days in many, many government
agencies on the delivery side, and without delivery, you can't turn
the crank on the major business outcomes.

Evan: Spot on. I talk a lot about theory
of constraints and the theory of...I've probably mentioned this in
a previous podcast, but an organization can only be as agile as its
least agile part.

In business, 30 years ago, that was software, so we invent
Agile. 10 years ago, that was operations, so we invent DevOps.
Today, in business, it's HR, it's finance...

Bob: [inaudible 10:00] .

Evan: ...but government is probably still
where the business was 20 years ago. In many government
organizations, they're only now getting the benefits of Agile, let
alone DevOps and full‑on business agility which is even in the
future.

That being said, we have some great stories, some great case
studies in the government space around policy developments being
done in using Agile, service delivery for social services being
delivered using Agile mindsets and techniques around the creation
of citizen‑centric approaches.

Everything from budget games being done in San Jose, I think it
was San Jose. If you Google, you'll find out exactly where it's
being run, where they crowdsource the budget from citizens using
Agile game theory. It's absolutely fantastic.

Bob: I was just chatting with somebody
from a government agency. We were actually talking about using the
Colleague Letter of Understanding with the Morningstar as a way of
creating a rather hierarchical structure, a mesh commitment
structure, within that organization. There're little pockets of
these ideas taking hold.

Evan: We have a video from the very first
business agility conference in New York in 2017. The deputy CIO of
the State of Washington had adopted holacracy in the state
government. I used to be a public servant, this is 10 years ago.
The thought of holacracy in government was mind‑blowing. I couldn't
believe they could even do that. They did and a huge success.

Bob: It can get a little tricky. I don't
know if the state governments are the same but federal sometimes
gets tricky when you hit the unions.

[laughter]

Evan: Yes. In that scenario, in the
institute, we're developing some position papers, some white papers
on various complex topics. Incentives, motivation reward is a white
paper that's being released tomorrow, in fact. By the time you
listen to this, it'll already be released, and we'll share the
link.

One of the next white papers that we're going to put out there
is business agility in a unionized environments, because a lot of
our members are in united environments that's complex.

Bob: We may often give entities like the
bureaucratic...paint them with a bureaucratic brush, but actually
another agency that we did some work in, they were partners in
creating an open workspace environment for everybody.

Bob: Going back to the report, some of
the key findings that we did come up with, market success is one of
the highest benefits of business agility, which I would actually be
surprised by. Not because I don't believe that business agility
brings with it financial and market success measures, but I didn't
think as a community that we were there yet.

I thought we had a while to go, that the benefits move on
softer. Now, we have some great quotes, some great feedback from
the survey respondents saying that now they have gained more
customers, greater customer satisfaction, more repeat business
through the adoption of business agility. The usual ones they are
around, better way of working, and so forth.

Bob: Retention of clients.

Evan: Retention of clients, yeah.

Bob: Competitive advantage. I see better
ways of working, came in at 16 percent, collaboration,
communication, not shocking 14, and engagement up as well. That's
what we see in the VersionOne survey on the IT delivery side, that
engagement goes up a lot.

Evan: When we look at challenges, the top
challenge, which should be of no surprise to anybody, is
leadership. Leaders love them, but they can either make or break a
transformation based on the culture that they help to instill in an
organization. Buy‑in is number two or three in the challenges.
What's the next one? That's embarrassing. I don't...

Bob: Just trying to find the page right
now.

[laughter]

Bob: Leadership, lack of buy‑in,
inappropriate organizational design.

Evan: Of course, old design. Sorry, I
should remember that one. It's off my head. Basically, the value
stream is broken.

Bob: The silos.

Evan: The silos. When work goes from team
to team to team, every hand off adds complexity and delays. An
agile organization is one where the value stream is as much as
possible contained in a single cohesive team.

I don't mean a small team, those teams can be big, but the
ownership, the accountability is held singly from ideation to
customer delivery. Companies still struggle with that, but that's
changing. We're seeing that change in companies although even in
government organizations.

Bob: Even if you can get a decent
alignment of the silos to create those, not solid line report, but
dotted line to the value stream, that can go a long ways. In
thinking about the market's success statistic, I actually think
that makes sense because if we look at the...Again, I don't want to
compare you guys, the VersionOne survey, but I'm...

[crosstalk]

Evan: ...is due. We've admired the
VersionOne survey for years.

Bob: It has been a valuable tool.

Evan: It's one of the reasons we created
this is to go [inaudible 15:53] .

Bob: Number one is better ability to
manage change. What do markets want? They want responsive goods and
services.

Evan: The market will evolve faster than
the company. It's why startups can out‑compete a legacy large
organization who's got hundred times the budget, a thousand times
the market share.

They're dominated and overtaken by a tiny startup because the
startup is able to adapt and provide a service that the customers
want as opposed to what has been delivered for the last 20 or 30
years, which maybe what the customers wanted 30 years ago, but time
moves on.

I know Uber and Airbnb and everything else. Those examples are
trotted out every single time if someone talks about market agility
or market entity.

Bob: [inaudible 16:48] .

[laughter]

Bob: [inaudible 16:50] is running in my
head.

Evan: They're the obvious ones, but it
doesn't matter what industry you're in. I spent the last four years
living in Singapore, and every bank there had a decent revenue
coming out of international remittance, sending money home.

Australians, Filipinos, Indians would send money back to their
home countries through the banks. Within the space of two years,
the FinTechs emerged. They had better, faster, cheaper services,
and the banks lost a couple of percent of their top line
overnight.

Bob: We get [inaudible 17:23] all the
time. That's just one possible transactional character.

Evan: If you put yourself in the shoes of
a bank, no one's going to take away the deposit account because
that's not a...Maybe I could be lying but I don't think that's a
disruptable service, partly because there's no money in a deposit
account.

Banks make their money out of credit cards and all these
transactions, and all these other things, so the FinTechs are
coming in.

Bob: They can be in the right market if
you've got some liquid cash that you're...

[crosstalk]

Evan: That's certainly not where the
banks are making their profit.

Bob: No.

Evan: The banks are looking at this
going, all of the stuff they're doing that are high profit, the
FinTechs can come in and do it better, faster, cheaper. All they're
going to be left with is the slow, low‑profit services, like core
banking. Now, they're desperately trying to become FinTechs
themselves.

If I'd walk into a bank 10 years ago and let's say, "Let's
create an agile bank," I would've been laughed out. Now, they're
coming to us saying, "How do we become an agile bank?"

Bob: "How do we disrupt ourselves before
someone else does?"

Evan: That's it. I use banking as an
example. The same is true in utilities, the same is true in
healthcare, engineering. Any industry which you think is
undisruptable, I guarantee you, will be disrupted within five
years.

Bob: We're seeing people fall off the
Fortune 500 lists.

Evan: 57 percent of the 1983 Fortune 500
no longer exists.

Bob: Not even just off the list. Just out
of existence.

Evan: Some have been acquired, some have
gone through merges, some have gone through divestments. They're a
fraction of what they were. Others have gone bankrupt. Some have
come out of bankruptcy. They're still nothing.

Bob: We'll have the link to the report.
Where can folks learn about the Business Agility Institute?

Evan: Thanks. We'll put the links below,
businessagility.institute. I love the fact that .institute is a
top‑level domain.

Bob: [laughs]

Evan: We bought that.

Bob: .institutionalized.

[laughter]

Evan: That's what I should be.
Absolutely. Businessagility.institute, you'll find all the
information. We're a membership organization. I do encourage all
your listeners to join up as a member. Help support us, help
support the community, and develop new and great research.

The inverse is true as well. It's not just a one‑way, we'll
provide you things. We want you to share your stories with us. If
you have a case study, if you would like us to create a white paper
on a topic, ask us. We will do our best to actually build that for
the community.

Bob: Thank you very much.

Evan: No, thank you very much, Bob. Until
next time.

Bob: Until next time.

Evan: [laughs] Thank you.

Bob: The Agile Toolkit Podcast is brought
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